FINANCE 1: CAPITAL MARKETS DAY 7 PREP PAGE
Solve the problem below, use any readings you need (you may need none!) to get the answers to the problems. We will
take care of the why in class. Bring questions to class if you are unclear about how or why.
Rea
Day 7: Getting to the Right Discount Rate, and
the Capital Asset Pricing Model
RSM 1331
Capital Markets and Valuation
Rotman School of Management
University of Toronto
November 1, 2016
Capital Asset Pricing Model
RSM 1331, 1/27
Towards the CAPM
I
I
Modern
FINANCE 1: CAPITAL MARKETS DAY 5 PREP PAGE
Solve the problems below, use any readings you need (you may need none!) to get the answers to the
problems. We will take care of the why in class. Bring questions to class if you are unclear about how
or why.
Re
Look over these problems for the Friday class. We will go over them in class together. You do not
need to turn anything in.
FINANCE 1: CAPITAL MARKETS DAY 4 PREP PAGE
Solve the problems below, use any readings you need (you may need none!) to get the answ
Day 4: Forward Rates, Term Structure,
Bond Volatility and Duration
RSM 1331
Capital Markets and Valuation
Rotman School of Management
University of Toronto
October 21, 2016
Forward Rates, Term Structure, and Duration
RSM 1331, 1/33
Group Presentation Note
Day 6: DCF Valuation and
Getting to the Right Discount Rate
RSM 1331
Capital Markets and Valuation
Rotman School of Management
University of Toronto
October 28, 2016
DCF Valuation
RSM 1331, 1/36
Group Presentation Notes Page: International Diversification
Topic 5
(Chapters 8-10)
Risk, Return and CAPM
Risk and Return
CAPM
Market Efficiency
Ling Cen
0
Objectives of This Topic
Know how to calculate expected returns,
variance, covariance, correlation coefficients
Understand the mean-variance frontier and the
Topic 4
(Chapter 7 in the Textbook )
Equity Markets and
Stock Valuation
Learning Objectives
Know features and types of stocks
Know how stock markets work and how stock
prices are quoted
Understand how stock prices depend on future
dividends and dividend g
Topic 2
Time Value of Money
(Chapter 5 of Textbook)
Motivation
lWhen you are facing a project, how can you
decide whether you should take it or not?
It is not difficult let us compare the cost and
benefit;
lProblem: for most projects, cash flows are
not g
MGFB10H3
Principle of Finance
Agenda for the first class
Introducing course instructor and teaching
assistants;
Explaining course structure and
requirements (Course Outline )
Topic 1: Introduction of Corporate Finance
2
Before I discuss the course
outline
Topic 2
Time Value of Money
(Chapter 5 of Textbook)
Motivation
When you are facing a project, how can you
decide whether you should take it or not?
It is not difficult let us compare the cost and
benefit;
Problem: for most projects, cash flows are
not gen
Topic 3
(Chapter 6 in the Textbook)
Interest Rates and
Bond Valuation
Learning Objectives
Understand the basic bond features and bond
market
Understand valuation of bonds
Understand the relationship between yield to
maturity (YTM), current yield and capit
UNIVERSITY OF TORONTO
Management
MGFB10 (Principles of Finance)
ASSIGNMENT 2
Due Date:
(L1/L2) Thursday, April 3, 2014, before your class starts
(L3/L4) Wednesday, April 2, 2014, before your class starts
Hardcopy submission only and you must submit in the
Topic 6 Part I
Net Present Value and Other
Investment Criteria
(Textbook Chapter 13)
Learning Objectives
Understand the Payback and Discounted
Payback Rule and its shortcomings
Understand the Net Present Value Rule and why
it is the best decision criter
1.
2.
3.
4
5
6
Ionlyneedtheequationinthefinal,ifIRRisasked.
7
8
9.
Comfort Plus is building a factory that can make 10,000 massage chairs per year for 5 years. The
factory will cost $10,000,000. In year 1 Comfort Plus will sell chairs for $1,020 each in n
Negative Interest
Rates
Team 55
Khadija Bharmal, Rodrigo Leifert, Shamim
Shabani, Sam Sun, Ethan Wolfe
What are Negative Interest
Rates?
Negative interest rates refer to deposits incurring
a storage fee rather than earning interest income
Historical Yield
Day 5: Basic DCF Valuation Models for Equities
RSM 1331
Capital Markets and Valuation
Rotman School of Management
University of Toronto
October 25, 2016
DCF Valuation Models for Equities
RSM 1331, 1/18
Group Presentation Notes Page: Negative Rates/Multipl
Day 3: Bond Arbitrage and
Bootstrapping the Term Structure
RSM 1331
Capital Markets and Valuation
Rotman School of Management
University of Toronto
October 18, 2016
Bond Arbitrage and the Term Structure
RSM 1331, 1/22
Group Presentation Notes Page: Govern
Practice Problems 1 (Days 1 5)
These questions mainly highlight the basic concepts covered in the textbook. They include a mix of easier
and harder questions. Some are more quantitative or require more calculations compared to what we
might ask on an exam
Day 2: Valuation of Risk-Free Bonds
RSM 1331
Capital Markets and Valuation
Rotman School of Management
University of Toronto
October 14, 2016
Valuation of Risk-Free Bonds
RSM 1331, 1/27
Definition of a Bond Revisited
I
A bond is a legally binding contract
FINANCE 1: CAPITALMARKETS DAY 3 PREP PAGE
We want to accomplish two valuation goals in the second week. First, we want to understand the basic
arbitrage idea using bonds as an example, and second, we want to practice typical problems enough
times that it
FINANCE 1: CAPITAL MARKETS DAY 2 PREP PAGE
We want to accomplish 2 valuation goals in the rest of this week. First, we want to understand the
basic calculation techniques for standard bond problems, and second, we want to practice typical
problems enough
FINANCE 1: CAPITAL MARKETS DAY 1 PREP PAGE
These readings and videos may be of help to you (but they are not absolutely required):
1. Textbook: Review Chapter 3 (pp. 61-72) and Chapter 4 (pp97-131). The concepts in these
chapters, e.g., the basics of Pres
Bond Calculations in Excel
Kent Womack and Brian Chu
2012, all rights reserved
Knowing How to Calculate: The Math and the Steps in Excel
This reading explains how to use the PRICE and YIELD functions in Excel.
Price Function
Calculating the Price of a Bo
BondBuilder Guide
Brief intro to Bonds
An entity that issues a bond, often called the bond issuer, is essentially borrowing money from the bond purchaser
(also called the bondholder). The issuer repays the loan by making a series of interest payments unti
Finance Methods Pre-Course
Mike Simutin
Rotman School of Management
University of Toronto
August 15-17, 2016
Rotman Finance Methods Pre-Course
1/57
What Is This Course, and Who Is It For?
I
This is a mini-course on the basics of finance
I
I
It is intended